The U.S. Department of Labor is suing a Jessup-based demolition contractor for allegedly discriminating against 162 Hispanic and African-American workers.

The lawsuit filed with the department's Office of Administrative Law Judges alleges that between 2011 and 2012, Potomac Abatement Inc. forced 145 Hispanic employees into lower-paying jobs and harassed them because of their race, and terminated 17 African-American workers because of their race.

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Potomac Abatement denied any wrongdoing.

"Potomac Abatement is committed to equal employment opportunity and affirmative action in the workplace and takes pride in being a high-quality, specialty contractor for various government agencies. Potomac regrets that the Office of Federal Contract Compliance Programs (OFCCP) has chosen not to recognize the significant actions Potomac has taken to diversify its workforce and has chosen instead to file an administrative complaint," the company said in a statement.

The company said in its statement that it will cooperate fully with the Labor Department "to demonstrate that its equal employment opportunity and affirmative action policies are being honored."

Potomac Abatement specializes in asbestos and lead removal, and primarily works on projects in the Washington area. The company's work included contracts for the Marine Corps, the Smithsonian Institution, the Internal Revenue Service, and the U.S. Departments of Labor and Veterans Affairs.

The suit follows an investigation by the Labor Department's Office of Federal Contract Compliance Programs. While the lawsuit pertains to employees who worked for the company between 2011 and 2012, the complaint alleges that discrimination has continued.

"Our investigation found egregious behavior by Potomac Abatement and its supervisors toward its workers," Patricia A. Shiu, director of the contract compliance office, said in a statement. "Potomac Abatement's treatment of its workers is appalling. As a federal subcontractor, this employer is supported with taxpayer funds and, as such, agrees to uphold the highest standards and fulfill its legal responsibilities."

The suit seeks back wages for the affected Hispanic and African-American workers, and reinstatement of laid-off African-American workers. The suit also calls for the company to develop a compliant equal employment opportunity policy.